Swiss money trail: From gold & diamond to stocks & bitcoins

June 29, 2014

Swiss GoldZurich/New Delhi, Jun 29: As Switzerland commits to cooperate in India's fight against black money, a new strategy of 'layering' through gold and diamond trade has come to light at Swiss banks to thwart any attempt for identification of real beneficiary owners of funds entrusted with them.

The activities and avenues being used for such 'layering' include diamond trade, gold and other jewellery exports, stock market transactions through use of complex funds, as also the fund transfer through new-age virtual currencies like bitcoin.

At a time when Switzerland has been facing intense pressure to act on the alleged use of Swiss banks for stashing black money by Indians, the government data of the Alpine nation shows that India has become the top destination for its gold exports with trade worth close to 6 billion Swiss francs (about Rs 40,000 crore) since the beginning of this year.

According to government and banking sources, there is a growing suspicion that a portion of gold and diamond trade is being used to route funds from Swiss banks to India and other destinations.

At the same time, the banks in Switzerland are now getting an undertaking signed by their clients, where the customer agrees to take responsibility for any possible regulatory or administrative compliance with international norms.

The development regarding alleged use of diamond and gold trade, as also stock market transactions and bitcoins, for layering of black money comes at a time when there has been an intense debate about Swiss authorities' assistance in India's fight against black money, which has been a politically sensitive issue in the country.

A senior Swiss government official recently said that Switzerland was ready to help India with data under its 'spontaneous information exchange' initiative on a proactive basis, although the European country continues to resist any information-sharing on requests based on 'stolen data'.

The statement triggered a major debate and Switzerland's Secretariat for International Financial Matters (SIF) issued a public statement on this matter. Some reports went on to suggest that Swiss authorities have already shared a list of Indians alleged to have stashed black money, but any such development was denied by both the government.

When contacted, SIF spokesperson Mario Tuor confirmed that the Swiss authorities "are in contact with the Indian government", but refused to share further details.

In reply to emailed queries, Tuor said that Switzerland is looking forward to working together with the new government in India in its fight against tax evasion.

Tuor, however, refused to comment on his reported remarks that Switzerland has not shared any list with India, neither it was preparing one for sharing with the Indian authorities.

The other routes being tapped by some Swiss bankers and their clients for 'layering' of their funds include art works, as also virtual currencies, they added.

'Layering' is generally second stage of money laundering process and this involves moving illicit funds around the financial system through a complex series of transactions to complicate the paper trail.

This 'layering' typically takes place between the first stage -- 'placement' of black money in the financial system either in cash vaults, or through a series of cash or sham financial transactions -- and before the final 'integration' stage when money is put back into the financial system through various transactions for the benefit of its final recipient.

The latest data compiled by Switzerland's Federal Customs Administration (FCA) shows that exports to India of gold, silver and coins to India has been rising consistently since January this year (981 million Swiss francs) and reached 1.2 billion Swiss francs (about Rs 8,000 crore) in May 2014.

Moreover, India accounted for over 32 per cent of entire Swiss exports of such items during May, up from just about 14 per cent at the beginning of this year. In the process, India has overtaken China as biggest destination for Swiss gold exports. Interestingly, Switzerland's overall gold export figures have fallen in recent months, but exports to India are rising.

Under global pressure, Switzerland decided earlier this year to provide country-wise breakdown of its gold trade.

The Financial Action Task Force (FATF), a global financial crimes combating body, had also said in one of its recent reports that India is one of the five countries where instances have been found that trade accounts of diamond business are being used to launder illegal funds.

Switzerland is also in the process of easing its various regulations, including those related to sharing of information with foreign jurisdictions in cases of suspected tax evasion and other financial crimes.

When asked whether India would be a beneficiary for automatic information exchange once a revised Tax Administrative Assistance Act comes into force in August, SIF spokesperson declined to give any direct answer and said it would depend on various developments within the country.

"Switzerland is actively taking part in international efforts aimed at better combating tax fraud and evasion such as the development of a worldwide standard for automatic exchange of information. Like India, Switzerland has endorsed the declaration on automatic exchange of information..." Tuor said.

On specific query that whether India would benefit, the spokesperson said that Switzerland would first wait until the new global standard on automatic exchange in tax matters has been defined by the OECD and accepted by the G20.

"Secondly, the Swiss government will propose how to implement the new standard in Switzerland. Thirdly, the Swiss parliament will decide on the government's proposals... I can't give you any further details," Tuor said.

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Agencies
July 8,2020

Washington D.C, Jul 8:  US Secretary of State, Mike Pompeo on Tuesday (local time) announced visa restrictions on some Chinese officials under the Reciprocal Access to Tibet Act, 2018.

"Today I am announcing visa restrictions on PRC government and Chinese Communist Party officials determined to be "substantially involved in the formulation or execution of policies related to access for foreigners to Tibetan areas," pursuant to the Reciprocal Access to Tibet Act of 2018," Pompeo said.

"Access to Tibetan areas is increasingly vital to regional stability, given the PRC's human rights abuses there, as well as Beijing's failure to prevent environmental degradation near the headwaters of Asia's major rivers," he said.

The US Secretary of State pointed out that Beijing has continued "systematically to obstruct travel to the Tibetan Autonomous Region (TAR) and other Tibetan areas" by U.S. diplomats and other officials, journalists, and tourists, while PRC officials and other citizens enjoy far greater access to the United States.

"The United States will continue to work to advance the sustainable economic development, environmental conservation, and humanitarian conditions of Tibetan communities within the People's Republic of China and abroad," he said.

Pompeo said US also remains "committed to supporting meaningful autonomy for Tibetans, respect for their fundamental and unalienable human rights, and the preservation of their unique religious, cultural, and linguistic identity".

"In the spirit of true reciprocity, we will work closely with the U.S. Congress to ensure U.S. citizens have full access to all areas of the People's Republic of China, including the TAR and other Tibetan areas," he said.

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News Network
July 27,2020

Chengdu, China, Jul 27: The American flag was lowered at the United States consulate in Chengdu on Monday, days after Beijing ordered it to close in retaliation for the shuttering of the Chinese consulate in Houston.

Footage on state broadcaster CCTV from outside the consulate showed the flag being slowly lowered early Monday morning, after diplomatic tensions soared between the two powers with both alleging the other had endangered national security.

Relations deteriorated in recent weeks in a Cold War-style standoff, with the Chengdu mission Friday ordered to shut in retaliation for the forced closure of Beijing's consulate in Houston, Texas.

The deadline for the Americans to exit Chengdu has been unclear, but the Chinese consulate in Houston was given 72 hours to close after the original order was made.

On Saturday news agency reporters saw workers removing the US insignia from the front of the consulate.

Over the weekend, removals trucks entered the US consulate and cleaners were seen carting large black rubbish bags from the building.

Beijing says closing the Chengdu consulate was a "legitimate and necessary response to the unreasonable measures by the United States", and has alleged that staff at the diplomatic mission endangered China's security and interests.

Washington officials, meanwhile, said there had been unacceptable efforts by the Chinese consulate in Houston to steal US corporate secrets.

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News Network
May 14,2020

May 14: The UN’s children agency has warned that an additional 6,000 children could die daily from preventable causes over the next six months as the COVID-19 pandemic weakens the health systems and disrupts routine services, the first time that the number of children dying before their fifth birthday could increase worldwide in decades.

As the coronavirus outbreak enters its fifth month, the UN Children’s Fund (UNICEF) requested USD 1.6 billion to support its humanitarian response for children impacted by the pandemic.

The health crisis is “quickly becoming a child rights crisis. And without urgent action, a further 6,000 under-fives could die each day,” it said.

With a dramatic increase in the costs of supplies, shipment and care, the agency appeal is up from a USD 651.6 million request made in late March – reflecting the devastating socioeconomic consequences of the disease and families’ rising needs.

"Schools are closed, parents are out of work and families are under strain," UNICEF Executive Director Henrietta Fore said on Tuesday.

 “As we reimagine what a post-COVID world would look like, these funds will help us respond to the crisis, recover from its aftermath, and protect children from its knock-on effects.”

The estimate of the 6,000 additional deaths from preventable causes over the next six months is based on an analysis by researchers from the Johns Hopkins Bloomberg School of Public Health, published on Wednesday in the Lancet Global Health Journal.

UNICEF said it was based on the worst of three scenarios analysing 118 low and middle-income countries, estimating that an additional 1.2 million deaths could occur in just the next six months, due to reductions in routine health coverage, and an increase in so-called child wasting.

Around 56,700 more maternal deaths could also occur in just six months, in addition to the 144,000 likely deaths across the same group of countries. The worst case scenario, of children dying before their fifth birthdays, would represent an increase "for the first time in decades,” Fore said.

"We must not let mothers and children become collateral damage in the fight against the virus. And we must not let decades of progress on reducing preventable child and maternal deaths, be lost,” she said.

Access to essential services, like routine immunisation, has already been compromised for hundreds of millions of children and threatens a significant increase in child mortality.

According to a UNICEF analysis, some 77 per cent of children under the age of 18 worldwide are living in one of 132 countries with COVID-19 movement restrictions.

The UN agency also spotlighted that the mental health and psychosocial impact of restricted movement, school closures and subsequent isolation are likely to intensify already high levels of stress, especially for vulnerable youth.

At the same time, they maintained that children living under restricted movement and socio-economic decline are in greater jeopardy of violence and neglect. Girls and women are at increased risk of sexual and gender-based violence.

The UNICEF pointed out that in many cases, refugee, migrant and internally displaced children are experiencing reduced access to protection and services while being increasingly exposed to xenophobia and discrimination.

“We have seen what the pandemic is doing to countries with developed health systems and we are concerned about what it would do to countries with weaker systems and fewer available resources,” Fore said.

In countries suffering from humanitarian crises, UNICEF is working to prevent transmission and mitigate the collateral impacts on children, women and vulnerable populations – with a special focus on access to health, nutrition, water and sanitation, education and protection.

To date, the UN agency said it has received USD 215 million to support its pandemic response, and additional funding will help build upon already-achieved results.

Within its response, UNICEF has reached more than 1.67 billion people with COVID-19 prevention messaging around hand washing and cough and sneeze hygiene; over 12 million with critical water, sanitation and hygiene supplies; and nearly 80 million children with distance or home-based learning.

The UN agency has also shipped to 52 countries, more than 6.6 million gloves, 1.3 million surgical masks, 428,000 N95 respirators and 34,500 COVID-19 diagnostic tests, among other items.

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